Insurers say payouts cost them more than £2billion a year – adding £90 to every insurance premium.

The number of claim firms is down by 1,068 since 2011, the Ministry of Justice said. But the Government wants to get even tougher by making whiplash cheats visit an independent medical panel to root them out.

It comes as new figures show car insurance prices have dropped by more than 12% over the past year - following a clamp-down on ambulance-chasing lawyers and rogue claims.

The average policy has fallen from £648 in October 2012 to £568 this month - a drop of £80.

Justice Secretary Chris Grayling said: “It’s not right that people who cheat get away with it while forcing up the price for everyone.”

MoTs will be capped at £54.85 until 2015, saving drivers £50million a year. The price freeze will save up to £50million for drivers every year, Ministry of Justice sources claimed.

It means the maximum price for the annual motor check will have been frozen since 2010.

Roads Minister Robert Goodwill said: “The costs of owning and running a car are felt by millions of households and businesses across the nation.

“The Government is determined to help keep those costs down. That is why we are freezing the price for an MOT test and looking again at the costs associated with getting a driving licence.

“We also want to make it easier for people to get a better deal on fuel at motorway service stations, for instance through a trial of motorway signs that will show motorists the different fuel prices on offer on their route.”

Motorway fuel signs showing where the best deal is will be trialled, and the price of theory and practical driving tests will be reviewed.